As the 2024 presidential election approaches, the cryptocurrency landscape is poised for significant change depending on the policies and ideologies endorsed by the candidates. Alex Thorn, the head of research at Galaxy Digital, has put forth a ‘policy scorecard’ that evaluates the positions of leading candidates on key issues affecting the crypto industry. In doing so, Thorn provides insights into how potential victories by candidates such as Vice President Kamala Harris or former President Donald Trump could reshape the regulatory environment for digital assets in the United States.
The Stakes for the Crypto Industry
Navigating the intricate relationship between politics and cryptocurrencies is essential for industry stakeholders. Candidates’ policy stances can either foster innovation or hinder growth, and as Thorn’s analysis indicates, the outcomes could vary significantly based on who secures the presidency. Harris, who is seen as having a less antagonistic approach to the crypto sector compared to current President Joe Biden, offers a potential avenue for somewhat improved relations between the government and the industry. That said, Thorn’s scorecard suggests that if Trump were to reclaim the presidency, the crypto sector would experience arguably the most favorable conditions, potentially leading to rapid and transformative changes.
Tax Policies: A Dichotomy of Approaches
When it comes to tax policies, the divergence between Harris and Trump becomes evident. Harris’s campaign is characterized by an aggressive stance against tax cuts that primarily benefit the wealthy, which could imply greater regulatory scrutiny over digital assets and those who invest in them. Analysts at Galaxy predict that this “extremely hostile” approach may not be conducive to a blossoming crypto environment.
Conversely, Trump’s historical posture toward tax policies is anticipated to provide clearer frameworks for taxation related to digital currencies. His proposed reforms are viewed as more transparent, potentially engendering a sense of stability that could attract both institutional and individual investors towards the crypto market. Such clarity might be especially advantageous for altcoins, which are currently navigating a highly volatile regulatory environment.
Both candidates also exhibit contrasting views on Bitcoin mining regulations. Under Biden, a proposed 30% tax on mining could stifle growth in this sector, whereas Harris has been described as slightly better than Biden. However, her policies remain cautious and potentially detrimental in contrast to Trump’s overt endorsement of Bitcoin mining as a form of domestic manufacturing. By advocating for miners and fostering communications within that community, Trump signals to the crypto world that his administration would prioritize growth and innovation, particularly in mining operations.
Yet, it’s important to note that while Harris’s mining policies may not be as harsh as Biden’s, they do not promise the same level of support that industry leaders may desire. This is particularly concerning for miners and those in the blockchain industry, who are crucial in shaping the future of cryptocurrencies in the US.
The banking policies proposed by each candidate also illustrate significant differences. Whispered discussions reveal that Harris may be inclined to ease Biden’s stringent ‘Operation Chokepoint 2.0’, suggesting a recognition of the necessity for the crypto sector to access traditional banking systems. In stark contrast, Trump advocates for a complete dismantling of such restrictions, allowing banks to engage directly with blockchain technologies. His opposition to a central bank digital currency (CBDC) aligns with a broader perspective he championed during his previous presidency: a decentralized financial ecosystem free from excessive government oversight.
This divergence emphasizes how critical banking regulations are for cryptocurrency adoption and innovation. A Trump presidency could herald a period of increased banking integration, while a Harris administration might maintain some existing barriers, creating a more challenging environment for crypto startups.
Self-Custody and Overall Implications for Altcoins
On the front of self-custody, both candidates exhibit a relatively muted stance. Harris has yet to articulate clear policies on self-custody, leaving ambiguity for investors concerned about their digital asset ownership rights. Meanwhile, Trump’s acknowledgment of self-custody at events like the Bitcoin Conference shows a degree of support but lacks the robust policy framework necessary to assure stakeholders.
As analysts prepare for the days leading up to the election, one crucial takeaway emerges: regardless of the winner, Bitcoin is expected to remain resilient and less affected by regulatory changes. In contrast, the future for altcoins is less certain and more dependent on which candidate emerges victorious. If Trump’s promises materialize into comprehensive regulatory clarity, it could lead to explosive growth for altcoins, contrasting with the potential risks Harris’s administration could pose.
Ultimately, the forthcoming election outcome will profoundly influence not only the regulatory landscape of cryptocurrencies in the US but also the perception of digital assets in terms of legitimacy and viability as a mainstream financial avenue. In sum, the crypto community should prepare for a future that could either elevate competitive advantages or introduce considerable obstacles, shaping the nascent landscape of digital currencies for years to come.